Financial aid applications, such as the FAFSA, should be submitted as soon as possible after January 1, but no sooner . You cannot submit the form before January 1, because the need analysis process uses your financial information from the prior tax year when calculating eligibility for the upcoming award year.
To meet the deadlines for most states you should submit the form no later than March 1 . Do not wait until you’ve filed your income tax returns with the IRS. You should either estimate your income – you’ll have a chance to correct errors later – or complete your tax returns early. (Your December pay stub should contain information about your total income for the year. You’ll find this helpful in estimating your income.)
When estimating your income, try to be as accurate as possible. Use your actual pay stubs from December. If your estimates are inaccurate, it will have a significant impact on your Expected Family Contribution. If there is a sizeable discrepancy, you will then need to correct the financial information when the Student Aid Report (SAR) arrives.
These financial aid deadlines and procedures are important if you hope to qualify for financial aid. If you have questions about completing the FAFSA financial aid form, please contact our office and we can help.
The 10 Most Asked Questions About Financial Aid
1. I probably don’t qualify for aid. Should I apply for aid anyway?
Yes. Many families mistakenly think they don’t qualify for aid and prevent themselves from receiving financial aid by failing to apply for it. In addition, there are a few sources of aid such as unsubsidized Stafford and PLUS loans that are available regardless of need. The FAFSA form is free. There is no good excuse for not applying.
2. Do I need to be admitted before I can apply for financial aid at a particular university?
No. You can apply for financial aid any time after January 1. To actually receive funds, however, you must be admitted and enrolled at the university.
3. Why can’t I submit my financial aid application before January 1?
The need analysis process for financial aid uses the family’s income and tax information from the most recent tax year (the base year) to judge your eligibility for need-based financial aid during the upcoming academic year (the award year). Since the base year ends December 31, you cannot submit a financial aid application until January 1.
4. Do I have to reapply for financial aid every year?
Yes. Most financial aid offices require that you apply for financial aid every year. If your financial circumstances change, you may get more or less aid. After your first year you will receive a “Renewal Application” which contains preprinted information from the previous year’s FAFSA. Note that your eligibility for financial aid may change significantly, especially if you have a different number of family members in college. Renewal of your financial aid package also depends on your making satisfactory academic progress toward a degree, such as earning a minimum number of credits and achieving a minimum GPA.
5. How do I apply for a Pell Grant and other types of Federal need-based aid?
Submit a FAFSA. To indicate interest in student employment, student loans and parent loans, you should check the appropriate boxes. Checking these boxes does not commit you to accepting these types of aid. You will have the opportunity to accept or decline each part of your aid package later. Leaving these boxes unchecked will not increase the amount of grants you receive.
6. Are my parents responsible for my educational loans?
No. Parents are, however, responsible for the Federal PLUS loans. Parents will only be responsible for your educational loans if you are under 18 and they co-sign your loan. In general you and you alone are responsible for repaying your educational loans. On the other hand, if your parents (or grandparents) want to help pay off your loan, you can have your billing statements sent to their address. Likewise, if your lender or loan company provides an electronic payment service where the monthly payments are automatically deducted from a bank account, your parents can agree to have the payments deducted from their account. But your parents are under no obligation to repay your loans. If they forget to pay the bill on time or decide to cancel the electronic payment agreement, you will be held responsible for the payments, not them.
7. Why is the family contribution listed on the SAR different from the family contribution expected by the university?
The federal formula for computing the expected family contribution is different from those used by many universities. In particular, the federal formula does not consider home equity as part of the assets, yet many private colleges will take home equity into consideration for their institutional funds.
8. If I take a leave of absence, do I have to start repaying my loans?
Not immediately. The subsidized Stafford loan has a grace period of 6 months and the Perkins loan has a grace period of 9 months before the student must begin repaying the loan. When you take a leave of absence you will not have to repay your loan until the grace period is used up. If you use up the grace period, however, when you graduate you will have to begin repaying your loan immediately. It is possible to request an extension to the grace period, but this must be done before the grace period is used up. If your grace period has run out in the middle of your leave of absence, you will have to start making payments on your student loans.
9. I got an outside scholarship. Should I report it to the financial aid office?
Yes. If you are receiving any kind of financial aid from university or government sources, you must report the scholarship to the financial aid office. Unfortunately, the university will adjust your financial aid package to compensate. Nevertheless, the outside scholarship will have some beneficial effects. At some universities outside scholarships are used to reduce the student loan level.
10. Are work-study earnings taxable?
Yes, the money earned from Federal Work-Study is generally subject to federal and state income tax, but exempt from FICA taxes (provided you are enrolled full time and work less than half-time). The student should be careful to report amounts based on the calendar year, not the school year.
The 5 Most Asked Questions About The FAFSA Form
1. How do I file the FAFSA financial aid form?
You may choose any of these three methods to file a Free Application for Federal Student Aid (FAFSA):
Apply online at http://www.fafsa.ed.gov (Recommended), or
Complete a PDF FAFSA (Note: PDF FAFSAs must be mailed for processing), or
Request a paper FAFSA by calling the Federal Student Aid Information Center at 1-800-4-FED-AID (1-800-433-3243) or 1-319-337-5665. If you are hearing impaired, please contact the TTY line at 1-800-730-8913.
2. How soon after January 1 should the FAFSA form be sent in? Is it better to wait until the income tax forms have been completed?
Send in the form as soon as possible after January 1. Do not wait until your taxes are done. Although it is better to do your taxes early, it is ok to use estimates of your income, so long as they aren’t very far off from the actual values. You will have an opportunity to correct any errors later on the Student Aid Report. If you wait too long, you might miss the deadline for state aid. Most states require the FAFSA to be submitted by March 1, and some as early as mid-February.
3. My parents are separated or divorced. Which parent is responsible for filling out the FAFSA?
If your parents are separated or divorced, the custodial parent is responsible for filling out the FAFSA. The custodial parent is the parent with whom you lived the most during the past 12 months. Note that this is not necessarily the same as the parent who has legal custody. If you did not live with one parent more than the other, the parent who provided you with the most financial support during the past twelve months should fill out the FAFSA. This is probably the parent who claimed you as a dependent on their tax return. If you have not received any support from either parent during the past 12 months, use the most recent calendar year for which you received some support from a parent. Note, however, that any child support and/or alimony received from the non-custodial parent must be included on the FAFSA.
4. My parents are divorced, and the parent I’m living with has remarried. Does my step-parent have to report his or her income and assets on the FAFSA?
Yes, provided that the parent you’re living with is the one filling out the FAFSA (your custodial parent). If the step-parent is married to your custodial parent at the time you fill out the FAFSA, they must report their income and assets, even if they weren’t married to them in the previous year.
5. My custodial parent remarried and signed a prenuptial agreement that absolves the step-parent from financial responsibility for my education. Why does my step-parent have to provide financial information on the FAFSA?
Prenuptial agreements are ignored by the federal need analysis process. After all, two individuals (parent and step-parent) cannot make an agreement between them that is binding on a third party (the federal government). The federal government considers the step-parent a source of support regardless of any prenuptial agreements to the contrary. If a step-parent marries the parent, he or she is considered responsible for supporting the parent and children, even if he or she is unwilling to do so.
The author of this newsletter is Brock Jolly.